Boris Nikolov, Erwan Morellec, and Norman Schürhoff

Measuring governance

‘Instead, the findings show that firm specific factors account for most of the differences. Firms with more cash, higher market-to-book ratio, and more intangible assets demonstrated the greatest cost impact from the conflict of interests.’

Neil Hare-Brown

Cyber risk

‘There must be a challenge to the current status quo. Boardrooms have become over-reliant on technical teams for advice and, as a result, restricted in how they can manage cyber risk from a strategic level. If controls are maintained only at operational level with no foundational strategy to maintain them then the overall cyber resilience is likely to be flawed.’

Daniele Vitale

European 2019 AGM season

‘One of the most notable findings in our analysis is how much more willing investors are becoming in opposing board members directly when they consider that there have been corporate governance failings.’

Yin-Hua Yeh

How to leave a lasting legacy?

‘The value of a well-designed succession plan is indisputable: firms which fail to provide a clear framework for succession after the passing of a founder often experience severe difficulties. However, merely having the vision to design a succession plan does not guarantee success. The further dimension to take into account is human nature.’

Alex Cameron and David Archer

Engaging boards with climate change – Part 2

‘Others emphasised the benefit of linking climate change reporting to a board’s normal financial reporting cycle and saw the principles issued by TCFD (Task Force for Climate- related Financial Disclosures) as a useful standard, requiring companies to engage with stakeholders and explain how they were contributing to reducing climate risks.’

Gay Haskins and Alison Gill

Kindness in leadership

‘A number of our interviewees ... suggested that kind leadership behaviours had a strong positive impact on organisational well-being and performance. For employees, the result is greater contentment, higher motivation, higher engagement and participation. Teams and management, they found, were more creative and innovative, with positive relationships more prevalent.’

Dr Florian Schilling

CG – science, craft or art?

‘Governance is about the quality of management supervision, ensuring that the company is managed in the interest of shareholders and other stakeholders. Compliance is about adherence to rules and regulations which are a necessary, but not a sufficient, condition for good governance. Used in the context of a football game, governance describes the quality of the game, while compliance ensures playing by the rules.’

Professor Colin Coulson-Thomas

Changing requirements and the future of CG

‘The structures, memberships and practices of boards may need to change to ensure that they remain relevant and can continue to discharge their responsibilities, including providing the responsible, shared and transformational leadership required to cope with a changing and uncertain business environment.’

Yin-Hua Yeh

Succession planning in family firms

‘I have found that if the founding entrepreneur has planned and formulated the succession process earlier, and if the successor has been guided by such a well-structured process for training and empowering his decisions, then business value during the process of succession tends to suffer less or in fact even increase as there is less likelihood of a damaging power struggle.’

Michael Henson and John Dawson

Modernising the UK AGM

‘While some boards may be reluctant for the fear of challenge, the reality is that visible stewardship through engagement is a corollary to strong governance and empowers both management and the board. This is governance in action.’

Paul Lee

Accountable capitalism

‘It has long been a personal red flag of mine to worry about companies whose only stated aim is the promotion of shareholder value. So many such companies boom marvellously for a short period of time and then see massive value destroyed as they find that narrow self-interest destroys value over time – destroying the very thing the directors claim to be targeting.’

Hans-Kristian Bryn and Carl Sjostrom

A new governance framework

‘Given that complex organisations are governed by layers of management, shareholders and public oversight, there is great benefit in articulating these boundaries by defining the company’s reward philosophy and risk appetite.’

David Archer and Alex Cameron

What price climate change?

‘A lack of consistent financial evaluation of the timing and scale of climate change impacts was cited as a barrier by several respondents – and this was linked with another barrier, the perceived gap between the long-term effects of a warming climate and a much shorter-term focus to most boardroom discussions.’

Bob McCormick and Rob Zivnuska

Shareholder engagement

‘As US-based investors build out their engagement teams in Europe and beyond, and European-based investors grow their presence in the US, a continued cross-pollination of engagement themes and styles is a likely result. Being able to adroitly navigate the shifting landscape will be a defining challenge for companies and boards in the years ahead.’

Professors Joan Loughrey and Terry McNulty

Too much expected of section 172?

‘Although the FRC’s Guidance on Board Effectiveness states that in order to protect the company’s long-term interests, difficult board decisions may “sometimes” adversely impact stakeholders, section 172 cannot prevent directors taking actions that are contrary to stakeholder interests or even the long-term interests of the company. No doubt such a company would not thrive. Nevertheless the section does not guard against bad business judgements taken in good faith.’

Anne Kirkeby

More authenticity?

‘Society and key stakeholders have more expectations than ever before in companies and they expect companies to be part of the solution within society, rather than the problem. The growing recognition that “good” business behaviour supports strong financial performance is becoming the norm.’

Philip Sydney

Evaluating Board Reviews

‘With Board Reviews now seemingly such an established part of the board’s annual cycle – and given the commitment of time and resources that a board is undertaking when embarking on a Review exercise – it is incumbent on all of those working in this space to focus on moving the practice forward.’

Vanessa Jones

Governance of large private UK companies

‘I find the Wates Principles refreshingly simple and uncomplicated. They provide scope for each company to clearly articulate their enterprise processes and attitudes that add value to their business, help build its reputation and ensure long-term continuity and success. That is the essence of good governance and if companies cannot clearly articulate that for themselves that should be a red-flag.’

Frode Odegard

Governance in the post-industrial transition

‘Mature firms face an onslaught on multiple fronts. The exponential growth in computing, storage and communications capacity we have seen over the last few decades is giving rise to a wide range of powerful technologies. ... Coupled with easy access to funding (due in part to low interest rates), this is lowering the threshold for new entrants disrupting established industry players.’

Dr Shann Turnbull

Removing toxic governance

‘Whether audits are for investors, directors or shareholders the auditor’s role is to judge the integrity of director accounts. It is ethically unacceptable for any law judge to be influenced or paid by the people they are judging. However, this conflicted toxic relationship is what regulators promote.’

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